There are so many demands on our health service, but one that does not cost much money and saves life is the need to enforce hand-washing by doctors and nurses between patients to stop the spread of hospital infections. They must get into this all-important routine. Downgrading of any service will only increase the danger that infections will win in the end.

1.19 pm

Lord James of Blackheath: My Lords, many noble Lords have spoken with passion and conviction about individual aspects of the National Health Service which concern them. Those concerns can be addressed only if they are set in the context of a stable, securely financed, well managed and continuing NHS as a body corporate.

We come to this debate in an almost complete data vacuum, with hardly any information before us by which to assess the current status of the National Health Service. All we have to rely on is a brief document entitled NHS Financial Performance: Quarter 22006-07, which is available in the Library. I have arrangedbecause I think it is very importantfor it to be broken out from the NHS website. A lady there can e-mail it directly to noble Lords computers at any time they wish. I recommend that all noble Lords read it. It is all we have to rely on.

I read the document in the context of comments which I made during my maiden speech two weeks ago, when I noted that it was claimed that the NHS would have a deficit of £650 million this year. I wanted to see whether that figure would be confirmed today. In fact, the report gives us a choice of three figures for the deficit in the current year. The £650 million figure receives no mention. The report refers instead to a deficit of £883 million, which is said to be the increased figureit implies that it was the figure quoted on the previous occasion, but it was not. The report then states that the deficit will be only £90 million for the current financial year. It is a remarkable conjuring trick which needs some thought. The figure of £90 million comes after the introduction of the write-back of a contingency of £350 million. We have no idea what that originally stood for, but it has now been thrown in. There is no reference yet to any consequences arising from the intended redundancy programme for 9,000 staff, which was announced earlier this year. The report states quite clearly that only 903 redundancies have been achieved so farwell, only another 8,000 to go. This is of concern, because it is said that the 8,000 redundancies will produce a saving of £250 million to the NHS for the remainder of this year, but we have no idea what, if anything, has come from the first 903 redundancies, which include 187 senior clinical staff. There is no reference, either, to what the cost of the redundancy programme has been or will be.

How do we get from £90 million to £873 million, which is now claimed to be the deficit? We take the £90 million and add back the £350 million, which comes to £440 million. We put in what we will assume to be the contingency for £250 million of benefit to come from the remaining 8,000 redundancies to be achieved, which takes us up to a figure of

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£690 million. I assume that the difference between £690 million and £873 million must be the extra cost of achieving the redundancy programme, although that figure seems a little light.

However, when we read on, the NHS report states that the deficit for the year will not be the £650 million or £873 million which we expected; it will be £1.173 billion. However, no explanation is given of how that figure is reached. We have therefore jumped through three figures in succession without any explanation. This simply will not do. We face a situation where the NHS is clearly playing around with the old problem of contingencies and provisions which magically bounce in and out of the accounts. We need clearer discipline in how these contingencies are applied. Contingencies which are carried over from a previous year are a great evil and an incitement to sloppy managers, who can then write them back into the accounts and pretend that they have achieved positive savings in running levels of overhead. However, it will have done nothing to the running rate of overhead or the funding burden for years to come.

The Chancellor of the Exchequer should outlaw anything but current-year contingencies straightaway, and he has a very good authority in Jesus Christ on his side for doing so. What else is the parable of the unjust steward or the parable of the talents? That is well worth thinking about. If the Chancellor feels a little uneasy about it, he is in good company.

As for the rest of the report, we are left in a vacuum. We should have seen a positive benefit of £500 million from this years redundancy programme. As I said in my maiden speech, I suspect strongly that that has already been conjured away to cover some hitherto unidentified and unadmitted black hole elsewhere in the NHS.

We are advised by the Office for National Statistics of a 1.3 per cent decline in the National Health Services productivity in every one of the nine years in which this Government have been in power. That is a cumulative decline of 10 per cent. Through the same period, the funding of the National Health Service has risen from £34 billion to a current figure of £72 billionan increase of 112 per centand it is scheduled to rise by another £22 billion, meaning an aggregate increase of £187 billion, in the next two years.

Those great companies Rover and Railtrack, and even the company which ran the Millennium Dome, all reached the point at which the National Health Service finds itself today. Nobody ever said, It is time to stop and ask where this really is. It is outrageous that noble Lords present today will not have the opportunity to learn precisely where that deficit is or what the running rate of cash going into the next financial year will be; moreover, they will not be given assurance that it is containable within the present fiscal policy and will not require swingeing new levels of tax to cover it.

Todays Times states that the Chancellor of the Exchequer is seeking a new task for his clunking great fist. I have one to suggest to him. He should summon a meeting of the Permanent Secretaries at

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the Department of Health and the Treasury and put together a small task force to assemble key information, which can be consolidated into a balance sheet and trading account for the NHS, and give us a definitive assessment of the deficit for the year. They should have it done by some time on Sunday afternoon. The Cabinet can then approve a Statement to be made to both Houses of Parliament on Monday morning and lighten our darkness.

1.27 pm

Lord Walton of Detchant: My Lords, having graduated in medicine 61 years ago, I judge that I am the only contributor to this debate who was practising medicine in the UK before the National Health Service began. I was proud to work as a consultant, and later as a clinical academic, in the NHS and I have been one of its fervent supporters.

There has been a proud record of achievement during the past 60 years, which I think everyone working in the health service acknowledges. When I gave the BMA lecture in 1996 to celebrate the passing of the National Health Service Act 1946, I pointed out that the number of consultants and GPs in the UK was about 25 per cent of the number in other relevant countries. I urged the Government of the day to consider the possibility of hypothecated taxation to produce an increase in the funding of the NHS, which had been long awaited. I had urged that over many years, but no Government had listened until the current oneI pay credit to them for doing so. They put a 1 per cent surcharge on national insurance, and the money has thereby increased.

However, even now, the number of GPs and consultants, compared with our competitors in Europe, is still about 50 per cent of the ideal. That is of course unachievable, because the finances of the NHS are finite, as my noble friend said so clearly. I remind him that, some 30 years ago, my former colleague the late Dr Henry Miller urged, in a public debate with Enoch Powell, that the funding and administration of the NHS should be handed over to an independent corporationthe idea is not new.

When I gave that lecture, I pointed out to the BMA that, in the 50 years before I spoke, I had lived through 14 reorganisations of the NHS. Within the past 10 years, I have lived through 11 reorganisations. Frankly, there have been times when the NHS has been afflicted by a disease called reorganisationitis, for which the only proper therapeutic action would be for the Government to take their hands off and not embark on yet further reorganisations. I exempt from these strictures the long-awaited and very reasonable proposals on A&E departments. As the noble Lord, Lord Rodgers, said, if one is to treat stroke properly as an emergency, that kind of organisation will be absolutely essential.

The Government have embarked on producing a bewildering plethora of commissions, authorities and other organisations within the NHS which have, in turn, spawned a forest of new acronyms to delight the heart of management consultants. Those bodies have been at times established then abolished, then merged

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and reconstructed, so that many people are quite unaware of exactly how the NHS has been advised and managed. It is time for a period of stability.

I pay tribute to the health service for having funded over many years a large number of clinical academic posts in our universities. That is a major achievement that has improved training and patient care, because todays discovery in basic science brings practical development in patient care. The Cooksey report, to which the noble Lord, Lord Crisp, referred, is going to be a major step in that direction. But a formal agreement was reached several years ago between the universities on the one hand and the NHS on the other that a funding stream called SIFTthe service increment for teachingdesigned for the training of medical students and nurses would be ring-fenced and preserved. Quietly, without consultation, that ring-fencing has been removed within the past two years. The result has been a devastating cut in the education budget for medical students and nurses at a time when medical student numbers have been sharply increased because of the need for more doctors and to reduce reliance on immigrant doctors.

Leicester Medical School has been threatened with a 20 per cent cut in its academic budget. It may be reduced to 10 per cent by negotiation, but the situation is still serious. More serious still is the fact that the new medical schools, assured in 2001 that their SIFT money would not be raided, have now been told that it is no longer ring-fenced. For example, the Peninsula Medical School faces a possible deficit of 15 per cent, with devastating effects on its training programme.

I refer to another difficulty. In the NHS there has been a massive development, much-awaited, of specialist nurses who have specialised in looking after patients with epilepsy, Parkinsonism, stoma care, multiple sclerosis and many other diseases. They have played an enormously important role and have often reduced the need for in-patient admission for patients whom they are looking after in the community. Now the PCTs are cutting the number of specialist nurses or diverting some of them into standard patient care because of financial constraints. I know that the Minister will say that the employment of specialist nurses is a matter for the PCTs, but I believe that governmental pressure to underline the importance of that group of people is vital. I refer to the point that the noble Baroness, Lady Masham, made. I have a consultant friend in a major London hospital, one of my former trainees, who has been told that he is no longer allowed to hold a follow-up clinic or to refer patients to another consultant in the same hospital. This is not the NHS that I was proud to serve.

Will the Government please exercise restraint, stop stirring the organisational pot and allow dedicated health professionals to get on with the job of looking after patients without being continually distracted into more non-clinical, administrative, non-productive activity?

1.34 pm

Lord Graham of Edmonton: My Lords, it is a great pleasure for someone such as myself to have the opportunity to speak in this important debate. I am

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very grateful to those colleagues in the House who have spoken and who have demonstrated their eminence and their knowledge of the National Health Service.

The title of the debate calls attention to the current situation, which means not only those with expertise and involvement but the recipients of the service. If I speak for anyone it is as a consumer of the National Health Service; I do not pretend to argue for or against on the many valid points that have been made, many of which I respect. But in an organisation that seeks to serve more than 50 million people, it is inevitable that in its organisation and service many people are hurt or aggrieved at the manner in which they are treated. That is the case throughout the country.

I accept that with all the instances that have been raised, which are blemishes on the record of the NHS, there is probably a case to answerand the Minister will do his normal competent job in that regard. But I ask noble Lords simply to look at my face. Right by my cheekbone, although noble Lords may not be able to see it very well, is a scar which I have borne since the age of 10, when I lived on Tyneside. My mother sent me to do some shopping. On my way back, half way up a street called Rye Hill, I was set upon by two boys, who said, Give us whats in that bag. I said, No, whereupon one of them pulled out a knife and stabbed me. He missed my eye by a fraction of an inch. I was taken to the local doctor, who inserted clips into my face, and I was healed. My mother was trying to keep our house together with a husband who was not only on the dole but on the means test, with five children of whom I was the eldest. Seven of us were living on 37 shillings a week, and she was asked to pay three guineas, which of course she could not afford. So for two years she paid sixpence a week to the doctor to pay off the bill. That was the situation in general at that time.

At another time, I lay on a hillside in Wales, the subject of friendly firehaving been shot down by a burst of fire from Bren gunswith my intestines in my hands. So I have had experience of the health service before it was the National Health Service.

Later on in my life, my wife suffered from an inherited disease called myotonic dystrophy. Sadly, as a result of that, she died on Boxing Day less than 12 months ago. Our two sons inherited the disease. So we have a family of a man, his wife and two sonsand I say, Thank goodness for the National Health Service!. I have a perspective on what it was like before the service existed, which I think many people who criticise the service sadly cannot judge. It is not that they have it too easy, but they have not had the experience to appreciate it.

I was delighted to hear my noble friend Lord Walton refer to his experiences. I was at a function the other day where a lady was asked where she was fromand she said, The Royal Victoria. I said, You mean the infirmary, and she said, Yes. On Tyneside the RVI was known simply as the infirmary rather than the Royal Victoria Infirmary. In every community there is such a placein Leeds it is St Jimmys and in my part

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of London there is Whipps Crosswhere the hospital is the saviour for so many people. In my life, I have had two DVDs

Noble Lords: Oh!

Lord Graham of Edmonton: My Lords, I mean two DVTsbut that is a record of a kind! I have a prostate condition and am a diabetic. One of my sons had ulcerated colitis and went to Barts Hospital, which is where they discovered the inherited disease. To those who criticise the National Health Service I simply say that they may by all means do so. I noted that the noble Lord, Lord Selsdon, said that far too often the health service is the subject of sniping and carping. People who have a genuine grievance do not seem to appreciate that it will be solved by the Minister and his team, if they work together as a team. I make no political point in saying that when the health service was established there was a need for it. That need has grown over the years. The health service serves the people of this country very well. I say to the Minister and his colleagues, Keep going and more power to your elbow. To those who do not believe it, I simply say, Oh ye of little faith, lift up your hearts; tomorrow we shall win.

1.40 pm

The Countess of Mar: My Lords, that was a very salutary speech. Like other speakers, I am most grateful to the noble Lord, Lord Colwyn, for instigating this debate today.

I propose to restrict my speech to two subjects, both of which are described by their detractors as figments of patients' imaginations, so I hope that noble Lords will bear with me. As a result they suffer a lack of establishment support and a serious paucity of funding.

It is only very recently that we have debated the subject of homeopathy. I am raising the subject again today because our homeopathic hospitals are endangered. I do not intend to return to the pros and cons of homeopathy itself. There are five NHS homeopathic hospitals in the UK: in Bristol, Liverpool, London, Tunbridge Wells and Glasgow. All have been part of the NHS since its inception in 1948, though several have existed for over a century.

These consultant-led services are staffed by fully qualified doctors, nurses and other professionals who have additional training in homeopathy and other complementary therapies such as acupuncture. As is usual in the NHS, patients are referred by their GP or specialist. Homeopathic hospitals are a unique asset to the NHS for several reasons: they offer patients genuine choice of treatment by providing evidence-based, highly professional complementary medicine; although small, they are highly innovativefor instance, acupuncture for pain and complementary cancer care, both now widely available in the NHS, were pioneered by the homeopathic hospitalsand they have made important research contributions, such as researching effectiveness gaps, conditions for which GPs lack effective treatments, and the outcome and cost-effectiveness of complementary medicine.

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The NHS homeopathic hospitals help many patients who have been failed by other parts of the NHS, including those suffering from effectiveness gap conditions, complex chronic problems, or conditions difficult to label and for whom conventional medicine has proved ineffective or has associated serious side effects. The treatments they offer are complementary to, and integrated with, conventional medicine. Their practitioners are qualified health professionals working within the NHS and communicating with NHS colleagues. Surveys consistently show that 70 to 80 per cent of patients report benefit and around 90 per cent are satisfied with their treatment.

In the past, Governments have reaffirmed their commitment to homeopathy in the NHS, a commitment made originally by Aneurin Bevan. Now, local NHS commissioning and the financial crisis currently affecting the NHS have placed these unique assets at risk. Decisions to refuse funding, which affect patients' ability to choose their treatments, are being made to satisfy short-term financial needs by NHS commissioners with little understanding of the value the hospitals provide. There is concern that commissioners are encouraged in this by a series of high-profile, hostile leaks to the media. These include a leak of a draft of the Smallwood report by the distinguished economist Christopher Smallwood, who highlighted the potential for complementary therapies to provide cost-effective NHS treatment options, which was commissioned by the Prince's Foundation for Integrated Health. The leak appeared on the front page of the Times on 25 August 2005. There was also a letter attacking complementary medicine, which was sent to chief executives of all primary care trusts and leaked on 23 May 2006again, on the front page of the Times.

While the long-term impact will be the irreversible loss of patient choice, which will leave many patients strandedin particular, those whom conventional medicine has failedthe amounts of money involved are tiny. West Kent Primary Care Trust wishes to cancel its contract of £160,000 a year with the homeopathic hospital in Tunbridge Wells. This contract accounts for 50 per cent of the patients seen at Tunbridge Wells and its loss would make the service unviable. Local reaction has been very strong: patients have already delivered a 3,000-signature petition to the primary care trust.

Other homeopathic hospitals are facing similar decisions by PCTs seeking to reduce costs. This is being done in the absence of a cost-benefit analysis. Have the additional costs that will be incurred treating patients elsewhere in the NHS been calculated? Because of the fragmented nature of NHS commissioning arrangements, no one body has oversight of this or of the potential consequences of the irreversible loss of these small, unique units that punch far above their weight in terms of patient care, innovation and research.

I ask the Minister whether Her Majesty's Government are still as committed to the continued success of all four hospitals in England, and, if they are, what measures Ministers propose to protect them. Additionally, I seek an assurance from the Minister, already given to the House by two of his recent predecessors, that patients who have started a

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course of treatment paid for by the NHS, and which is clinically effective, will not have their funding withdrawn by reason of cost alone.